Víctor Kong, President at Cisneros Interactive, forecasts that advertising in audio will experience sustained growth, which is why the company under RedMas, bet on that market in the U.S. and in Latin America. “We did it because we are optimistic that users will increase listening time through streaming services. We know that more listeners will reproduce podcasts, music and news programs on their computers or smartphones” he points out in his blog. In his article titled El Negocio Casi Imposible de la Nueva Música [The Almost Impossible Business of New Music] he argues that the negative part of the post is due to the fact that more popular companies offering these broadcast services have huge incomes and growth and nevertheless continue losing money. “Why? Because a great part of their income is allocated to paying music labels and publishers.”He mentioned the cases of Pandora and Spotify, that will raise so much in scale that one day they will be profitable. “The intention of my title is to emphasize that after many years in the business and with more than a billion dollars in income, these companies continue losing money. Margins, when they turn positive, will probably not be very high. For these two companies —that are revolutionizing the music industry and benefiting millions of users with a great service and also the music industry as a whole, with a great flow of income—, the profit they will make doesn’t seem to match their innovation efforts nor the risk they took.”
